Monday, August 20, 2012

How To Trade Stocks

If you either are a beginner or have yet to trade successfully, this post on how to trade stocks is for you.
Trading stocks is as much of a mentality as it is a science. You have to be able to have a ystem that you can obey, and if you are compusively buying or selling stocks or if you are responding by emotion, you are already in serious trouble. If you don't have the mentality for buying a stock lower, you shouldn't be a value investor. If you don't have the patience you shouldn't be either. If your mentality isn't one of careful management and following your signals, you shouldn't be a swing trader with exact rules and one who depends on piece for action, but instead one that has say a system that buys with the plan of selling after 3 days regardless of price and if so, you must be right more often than not more so than making sure when you are right it produces a huge win.
But do not get into a single stock (and if you are, get out now), if you don't first have actual rules on what to do. You need a good money management system first and foremost. The exit plan and how you are going to sell.

So what types of money management system can you have?
Lets start with the basics on how you might sell.
You can use a:

hard stop (when prices fall below a certain price threshold, your broker account is programed to sell immediately at whatever price it can get).
Mental stop (same as hard stop, only performed manually)
Trailing stop (If you have a 5% trailing stop, you would sell anytime that the stock comes down 5% from it's "high" since you bought it. If it went up 30% you would stop out at a 25% profit if it dropped 5% or more intraday for the first time.
Time Stop - (This can be as simple as selling regardless of price after a certain amount of days or regardless of conditions, or more complex such as "sell IF conditions (such as a new high is not made, or a break below a certain point is made)
Limit sell- (The price breaking above a certain point results in a sell automatically. If you buy at $30 and put in a $40 limit sell order it will exit automatically as price crosses $40)
Multiple stops - A combination of two or more stops either the same or different in type.
No stop: suitable in 10 year investments which your downside is 100% of your investment, and as a result, your upside must be great to compensate and you must really understand the model. (see Warren Buffett Style Investing)

All that is only one aspect of investing. But do not buy without knowing first how you are going to sell. That covers SELLING, but what about buying? And what about the actual prices for action or criteria for identifying which stocks to buy?

People have names for different kinds of trading or investing. Swing trading, day trading, position trading, investing,etc. You don't need to get caught up in all of this, but you do need to know what your plan s before you even find out which stock you want to buy.
I will have to make this into more than one post because I already am getting long winded (or long-fingered, or whatever you call someone who has typed for a long time and now his fingers are sore)

But let's start it out with a few examples. Johnny wants to trade according to certain patterns, you can call him a technical trader if you like. He wants to hold for an average of 5 days. As a result price patterns are perhaps not best, but candlestick patterns are. He should get a book on candlestick patterns for starters. He should identify or develop a system that assists in his identification of a small group of the best and somewhat common candlestick patterns. Once he understands them, he will identify the candlestick, set a stop buy order at a few cents above the breakout price, and perhaps an alert just below the breakdown price (so he can take off the buy order and move on). He will have to repeat this on a bunch of stocks as many of the patterns will not confirm. Once he gets a notification that a purchase has been made, he then sets some sort of alert 5 days from the purchase price that it's his day to sell. Now based upon history he has an idea of average amount earned per trade and based upon how much he has committed to each trade and how many trades he expects to make in a year, he can determine a certain expectation of profit.  He should be conservative and estimate that his trades may not work out as well, commission happens, lag period and times when he is not invested may occur, but that way he can come up with a conservative estimate on an excel spreadsheet just by crunching a few numbers. This way, he can determine the annualized rate of return for his strategy. His next plan is to find anything that might boost the strategy and add it. Perhaps one particular trade makes 4% per trade and another only makes 3% but the 3% trade occurs 5 times as often and as a result there are more trades within a year and overall a better result. Either way there should be systems that one can implement to enhance your results.

Wednesday, October 27, 2010

Stock Trading Investments

I'm sorry for the readers of my Explosive Stocks Trading Systems blog. I'm not quite sure what happened, but somehow my blog got hacked or something. I believe the email address that allows me to publish via email was hacked and used to spam. I tried recovering it but I could not do so successfully. So my 300 posts or whatever the heck it was is gone wihout a way to recover it.

However, I was fortunate enough to recover my URL.

Additionally, in the meantime I've been working off my own domain name talking about stock, trading, investments and other things such as trading systems.

I will try to reconstruct the posts to the best of my abilities on this blog, but in the meantime be sure to check out the following website.


update: I had about 300 posts on my old blog. The bad thing is I won't get anywhere near as many back. The good news is is going to allow me to go back and get a handful, and I also will be able to identify several post titles there and try to reconstruct them on my own. Should not be fun to redo everything but it must be done.

Monday, July 12, 2010

we went bear hunting today at lightning

Wow... we sure got a lot of bear hunting in today... Since the Dow went up nearly 300 today, I guess we need to speed things up...
This video seems much more appropriate than the first one.

note: This was one of the fraction of the 300 posts I had that I was able to recover thanks to

Wednesday, March 17, 2010

penny stocks to watch

Penny stock to watch – penny stocks offer investors ways to trade, buy, or sell stocks. Investors can invest $1 and get a turnaround of $35. The risks however make it harder for investors to earn money. Hot penny stocks to watch should be considered because you can stay alert to the shifts in the stock markets. The trading industry is one of the largest growing businesses on the market. Penny stocks are making its way in stocks since people are drawn to the low startup costs to get into the stock market. Yet...
...although investing in the penny market is reasonable, there are risks involved. Learning which penny stocks to watch for can help you reduce those risks. People often confuse stocks that are penny stocks with having upside. company is worth $10 million it can double to $20 million easier than a $100 billion dollar business can go to $200 billion. So a $1 stock must go to $2 quicker than a $100 stock can go to $200. But that's flawed logic. Stocks are priced based on their market cap divided by shares. So a $100 billion dollar company could be selling at $1 per share or 1 share of $100 billion. What people are generally looking for is not a penny stock but a small cap stock. Actually, generally the penny stock buyers are the "lotto ticket" type that just want to buy a dream. In reality, these people would be better making intelligent decisions with regards to which stock to buy, and buying stock options instead out of the money. This way they still have the extreme high risk high reward and they can still spend a small amount of capital while taking that risk.

stocks to watch 2010

According to the latest stock news, Potash Corporation of Saskatchewan Incorporation (POT) Shares is in the break out mode. It is predicting that in 2010 the company’s sales will increase. It is a forecast that tells investors that it is time to become a shareholder since the market is warm.

Apple (AAPL) is another company that is increasing sales during 2010. The iPhone market in particular has already increased per quarter. This means that more Apple, Mac sales will occur this year. It would be easy to gain around 30 to 50 percent by investing in Apple’s company.

General Electric (GE) is doing well also. GE is one of the most recommended companies to invest in because it is safer. They have already hit over $15 in stocks and expect to increase to $8 more this year.

GMCR (Green Mountain Coffee Roasters) is growing in the stock shares. The Keurig coffer marker is a hot item. This is another hot small cap stock to watch. Since the company allowed Wal-Mart to sell their coffee marker, and since they bought the Timothy coffee marker and made it available in Canada, there has been a battle in bidding amid GMCR and Peet’s coffee maker. Current trading for GMCR is over $60. Some people are projecting it will hit $90 this year.

Other stocks to watch in 2010 include Citigroup © and Research in Motion (RIMM). Citigroup may reach up to $7 during 2010. This means that it could gain as much as 80 or 100%.

RIMM shares are in the low 60s at this time since Black Berry struggles against competitors. The company is trading at around 13 times the 2010 earnings. It is projected that it will increase to $90.

Penny stocks are claimed to be riskier than other stock marketing. Thus, if you have not gotten in on the latest penny stock news now is the time to get started. This is a few of the hot stocks for 2010, but we recommend that you go online and so some more research if you plan to become an investor.

Other companies you may want to research or put on your penny stocks to watch list is Sirius XM Radio (SIRI) and Cell Therapeutics (CTIC). These companies are projected to do well this year also.

Wednesday, March 3, 2010

buy shares

The stock market gives everyone the opportunity to buy a piece of a company that offers shares or stocks to the public. People from all types of financial backgrounds can buy and sell stocks just like the millionaires. Some shy away from trading due to not completely understanding how the market works. One thing that must be verified should be the legitimacy of the company. All it will take is a telephone call to the company or doing some research on line. Deciding on a stockbroker is the first thing that must be done prior to selecting stocks. A broker that has years of experience will be the best choice. To make stock investments without the help of someone experienced would be an unwise choice. Buying shares is much easier than trying to make money selling some type of product or service. To buy shares on line will take the expertise of an advisor prior to purchase. Being able to understand the basic fundamental aspects of what it takes to buy stock shares can be confusing at first. When it comes to making the decision to buy stocks, there are certain things that must be considered like finding the ones that show signs of long term growth. Many individuals will start trading what is classified as the penny stock. The penny stocks can be purchased for less than one dollar. One of the most important factor is the financial health of the company. If the major news channels are broadcasting financial woes regarding a particular company, it normally means a substantial drop in the stock prices. Some individuals capitalize on the misfortunes of companies by buying shares at a low price in hopes that some type of recovery will take place in the near future. Deciding to buy stocks shares can be a hard decision to make. It may take months of studying the performance of certain stocks before an informed decision can be made regarding which ones to purchase. Due to the instability of major companies, many major stocks have decreased in price. Companies that were selling stocks for hundreds of dollars are now being sold for a dollar or two. It has become so easy to buy shares on line. The hardest choice to make will be what stocks to buy. If limited knowledge of the market exists, then the aid of a broker or brokerage firm may be needed. A commission will be payable to the brokerage firm. Trading on line stocks is very fast paced and is not for the faint at heart. It does not take much money to start day trading so the average person can participate. Being able to maintain self control and not give up when the stocks show signs of deceasing in value is not an easy task. Knowing when to sell is a decision that can be hard to make. Prior to taking the plunge when it comes to buying stocks, take the time to do some research regarding the trends of the market. Being prepared to lose money is one of the hardest obstacles that most will have to overcome.

good stocks to buy

Are you looking for good stocks to buy? Have newsletter promises of the next hot stocks to buy if you pay them a large subscription gotten you curious to buy stocks, yet you don't want to pay for such a large fee?

Having a real broker is handy because you can have face to face consultations A personal broker can be expensive, can be worth the money. You want to know which one out there is a good stock to buy. Well, you get what you pay for. If you do not enjoy spending time on the computer or you are known to make mistakes on computers, perhaps you should pay the extra cost of a personal broker.

The process of online stock buying is quite simple for a novice and can help you know which stocks are good stocks to buy right NOW. The best time to use an online broker is when: You know (when you actually understand the market) enough to not need advice on good stocks to buy. You are certain which stocks you plan to buy. You need real time quotes for, for instance, day trading (buy and sell on a day to day or even minute to minute basis.) You need their research facilities for convenience.

Remember that an online broker is not your buddy. His or her purpose is to make money for their own pocket, and they will work to that end, whether you prosper or fail. Most online brokers have real time trading. That means that they can make a trade instantly. Some familiar ones are Fidelity Investments who sell IRAs and do online trading; Scottrade, who offers three levels of trading; TD Ameritrade who is more a long term planners than a day trader: andE*Trade who does trading in 7 markets and 6 local currencies: , the United States, Canada , the U.K., Germany, Hong Kong, France, and Japan. Commissions presently are in the range of $6.99 to $9.99. Also, there is often a minimum deposit for opening an account with an online broker. This can range from $500 - $2,000.
Always prescreen your stocks.
Determine how many stocks you can afford to buy. Know the likely loss potential for each transaction and act accordingly. Some buyers never let any one stock purchase cost more than 1% of the commissions. In other words, to buy stock abc that costs $1 to buy make certain to have $100 to invest. Compare each purchase with the whole portfolio. Then you can adjust the size of your investment.

One can make some money buying shares online and trading stocks with small sums of money. Buying penny stocks is as good a place to start as any. Good penny stocks to buy can cost less than $1 and can double in price. Remember, risks are much greater with penny stocks than with other stocks. They are either small undiscovered companies which will grow or fold due to management beyond your control, or they are out and out scams. Make them a small part of your portfolio. You must have the information needed to make a very well informed decision if you are buying penny stocks. Never let emotions enter the arena of stock buying or you will lose money and what seems like a good stock to by may turn out to be a real loser.

Choosing Stocks to Buy Now

Finding places to invest your money in today’s struggling economy can be difficult, and the tumultuous nature of the market doesn't make it any easier to decide what stocks to buy now. There are always inspirational stories of microcap, or penny stock investors striking it rich by holding a long position their holdings, or savvy options players who leveraged huge gains in the market, but these stories are the exception to the rule. They require constant and diligent maintenance and research that the average investor doesn’t have time to apply. To find the right financial stocks to buy now, start with a solid strategy that won’t be deviated from. The first step in this plan is to avoid overcomplicating your approach. Too much research and analysis can become a substitute for real action. Worse yet, a person can research a stock until they convince themselves it’s worth buying. The best stock to buy now has the signs of still being the best in the near or far future. To find companies that have this attribute, look for those paying strong dividends over the long term. Even in a negative return market, factoring in dividend returns can create a positive. This was true in 2004 for both the DOW Jones and the S & P 500. The attraction of dividends is their exponential rates of return compared with non-dividend paying companies. Companies with a long record of paying out to their stockholders are the priority to look into. Newer companies may seek to reduce dividend payments to expand the company. One of the best stocks to buy right now is Johnson & Johnson, who have been paying dividends as high as 3.3% for decades. The opposite is true of Whole Foods, who decided to cut dividends to put the money into growing the company. One of the best stocks to buy right now is Johnson & Johnson, who have been paying dividends as high as 3.3% for decades. The opposite is true of Whole Foods, who decided to cut dividends to put the money into growing the company. Johnson & Johnson has been paying out and raising their dividend since 1944. In general, a good stock to buy now has great cash flow so there aren’t any concerns about receiving dividend payments in the future. The next part of this simple strategy is to hold on to a dividend paying company’s stock indefinitely. After enough time passes, the dividend payments surpass the original amount invested. and this process can be sped up by reinvesting your dividend payments to buy more shares and receive larger payouts at the quarterly dividend payment. Other stocks to buy right now are Hansen Natural Corp, a beverages manufacturer and distrubutor, and Intuitive Surgical, a company that blew up as a microcap and now sells for over $300. Hot stocks to buy now may be a sell or a hold tomorrow. Keep the cashflow, the reputation, and the experience of the management team in mind when researching opportunities.